Mozambique's economy opportunities

Thursday, 05 May 2011 08:48

Page 6 of 7

Mining

Sizeable foreign capital and technical expertise have gone into building a diversified mining industry. Brazilian giant Vale, the world’s biggest iron ore miner, and Ireland-based Kenmare Resources are investing heavily in the coal and titanium sectors. Vale is developing the Moatize basin – ranked among the few unexploited regions for coal reserves – in a project costing $1.5bn and projected to yield 40mn tonnes of coal per/year, while Kenmare Resources’ $450mn venture focuses on the Moma titanium mine (the world’s largest).

Riversdale Mining of Australia and India’s Tata Steel also plan to invest $800mn in the Benga coal mine, which could produce 20mn tonnes/year in the long-term. The country’s total coal reserves are estimated at 23bn tonnes. Mineral exports could rise by $1bn annually when the Moatize coalmine reaches full production. According to official sources, eight new coalmines will be onstream by 2016, of which two should be operational by mid-2011.

Opportunities also exist for mining majors and juniors to capitalise on ‘untapped’ deposits of gold, precious and semi-precious stones, iron ore, bauxite, beryllium, tantalite, copper, lead and even uranium. The modernised mining code and regulations have strengthened Mozambique’s mining legislation on a level with global best practice. The new mining cadastre (with four regional offices) has contributed to the processing of about 1,000 licenses to date.

The government is now planning the privatisations of electricity, telecoms, ports and the railways. Among commercially viable entities that could attract strategic foreign investors include ENH (responsible for exploration and processing of gas), LAM (the national carrier) and Portos e Caminhos de Ferro de Mocambique (the parastatal in charge of the railways and five ports).